I own a W115 240d 4 speed (now restored). I experienced similar symptoms to you which I was able to drastically reduce without a rebuild.
1) Perform an
AUTO RX engine oil treatment (2 bottles). A quick google search will highlight that there is no safer way to remove sludge, carbon deposits or varnish from your motor internals, allowing for reconditioning of seals. It takes 5K miles for a treatment to be completed so make sure you follow instructions precisely.
During this time, I treated the fuel system with:
2) A Liqui Moly Diesel Purge (2 bottles).
3) Followed by Chevon Techron fuel additive (diesel). I use two consecutive bottles at first followed by one before every oil change.
IF Auto Rx does not solve your oil consumption/ blow by, then your only option left is to use
Engine Restorer. This metallurgical chemical compound bonds to worn cylinder walls to undo damage due to past neglect.
Given that these cost <$150 combined, I highly recommend you attempt to rejuvenate the original motor vs. attempt a swap. I can assure you none of the above are snake oil and all of my 65 horses never rode better!